DECISION OF THE UPPER TRIBUNAL
(ADMINISTRATIVE APPEALS CHAMBER)

The DECISION of the Upper Tribunal is to allow the Appellant’s appeal.

The decision of the Middlesbrough First-tier Tribunal dated 5 January 2015 under file reference SC262/14/00279 involves an error on a point of law and is set aside. The Upper Tribunal re-makes the Tribunal’s decision in the following terms:

“The Appellant’s appeal is allowed. HMRC’s original decision of 27 May 2014, as confirmed on mandatory reconsideration on 5 September 2014, is revised.
The Appellant was not living together as husband and wife with her partner as from 7 April 2013.”

This decision is given under section 12(2)(a) and 12(2)(b)(ii) of the Tribunals, Courts and Enforcement Act 2007.

REASONS FOR DECISION

An introduction to a sorry tale
1.	The Appellant in this case was badly let down by HMRC decision-making when her 2013/2014 tax credits claim was terminated in May 2014. She appealed to the independent First-tier Tribunal (“the Tribunal”). Unfortunately the Tribunal failed to approach the evidence in a sufficiently independent frame of mind when, in January 2015, it wrongly confirmed the HMRC’s decision to stop her tax credits. I now allow her further appeal to the Upper Tribunal and make the decision that HMRC and the Tribunal should have made – namely that her claim to tax credits as a single person should not have been stopped when it was.

The background to the appeal to the Tribunal4
2.	The Appellant was at the relevant time a single parent with three young children. To preserve her anonymity, I call her Sally in this decision (not her real name). Sally was in part-time work and was also acting as carer for her brother, who had serious mental health problems. Her children’s father was Martin (again, not his real name). There was a history of domestic abuse by Martin against Sally in the presence of the children. As a result, social services had become involved with the family. A detailed child protection plan was in place with very strict conditions on who could live at (and even visit) Sally’s address. Sally’s new partner was David (also not his real name). He apparently also had a record of violence with previous partners and a history of drug abuse. Social services had concerns about both Michael and David.

3.	HMRC made an initial award of tax credits for the 2013/14 tax year on the basis that Sally was a single parent with three dependent children. In May 2014 an HMRC officer started to make enquiries as various records (HMRC data, credit checks, etc) appeared to show that David was living at Sally’s address. On 27 May 2014 HMRC decided that Sally had not been entitled to claim tax credits as a single person as from April 2013. That decision was confirmed following a mandatory reconsideration in September 2014.  Sally appealed to the Tribunal.

The Tribunal’s decision
4.	Sally did not attend the Tribunal hearing, but she had provided both HMRC and the Tribunal with a considerable amount of evidence, both in her own letters and by way of various documents.

5.	The Tribunal’s decision notice confirmed HMRC’s mandatory reconsideration decision. It gave brief summary reasons to the effect that “the overall evidence on a balance of probabilities is that both the Appellant and David were living together at the same address.” It added that “no explanation whatsoever has been forthcoming from David as to why he has used the Appellant’s address for financial product applications”.

6.	This last comment was, in a word, wrong. Explanations had been forthcoming. Sally had told HMRC in a telephone call, as noted on file, that David “uses address for mail etc as no fixed abode when he came out of prison, he stays with his sister”. That same phone record includes the following note by the HMRC officer:

	“Asked Sally why David did not claim from one of the other addresses he lives at, Sally said because they claim benefits and it would cause problems for them, advised it has caused problems for her instead.”

7.	The statement of reasons simply repeated the same comment about there being “no explanation whatsoever” as to why David had used Sally’s address. There obviously was an explanation. The question was whether the Tribunal found that explanation credible. In that regard the statement of reasons also “noted” Sally’s correspondence about David’s other addresses, adding “nevertheless one would have expected evidence from David himself as to why he used those addresses if he was only staying there on one or two nights maximum per week.” In her application for permission to appeal, Sally included an annotated copy of the Tribunal’s statement of reasons. She had written against this passage “David has never been contacted” – an entirely fair point. In all, having set out a number of findings of fact, the Tribunal’s reasons for its conclusion to confirm HMRC’s decision was the same length as this paragraph in this decision. This was simply not good enough, given all the evidence.

8.	Sally appealed to the Upper Tribunal. District Tribunal Judge Jacques gave her permission to appeal.

The proceedings before the Upper Tribunal
9.	Giving directions on the appeal, I made the following observations:

	“2.	I can see why Judge Jacques gave permission to appeal. The FTT seems to have barely engaged with the Appellant’s arguments, especially her point about the terms of the child protection arrangements. It seems to me virtually inevitable that this appeal will succeed given the limitations of the FTT’s fact-finding and reasoning.

	3.	There are two particular points on which the submissions of HMRC are invited before disposing of this appeal.

	4.	The first relates to the Appellant’s point on her form UT1 that ‘HMRC have also not given you all papers only papers since I appealed their decision’ (p.104). This is supported by her comments in her original letter of appeal (p.7) which refers to various documentation having been sent previously to HMRC. Does HMRC still hold that information and, if so, why was it not shown to the FTT?

	5.	The second is that it seems to me, on an initial review of the papers, that the evidence placing the Appellant’s partner at her address in April 2013 and living with her as a member of the same household is at best slim. Is this a case which the Upper Tribunal should decide for itself rather than send back for re-hearing by a different FTT? If so, what decision would HMRC now propose should be made?”

10.	Ms Karen Dinham has provided a helpful submission on Sally’s appeal to the Upper Tribunal. She analyses the evidence that was before the Tribunal with some care. In short, her assessment is that the Tribunal erred in law because it failed to explain what weight it gave to Sally’s evidence and/or why that evidence was disregarded. She also suggests that the Tribunal appeared to be reviewing the decision under appeal, rather than deciding the case again on its factual merits.

11.	Sally’s response now is understandably that she is “very pleased my points & evidence have now been taken into account”.

The Upper Tribunal’s analysis on this appeal
12.	I could simply allow this appeal on that agreed basis without further ado. However, this is yet another case where neither HMRC nor the Tribunal has adequately considered the evidence before it. So some further comments are in order.

13.	I note that Ms Dinham does not directly address the first question I posed, namely whether HMRC held other information relevant to the appeal which had not been disclosed to the Tribunal. In fairness, she did not need to answer that question, given the conclusion she reached. I do not need to investigate the matter further. On the basis of experience in other similar cases, I regard it as entirely likely that the appeal bundle does not include all relevant documentation. In particular, it is probable that some evidence supplied by Sally is missing from the file. However, there is more than enough evidence on file to decide the appeal in Sally’s favour without pursuing this point.

14.	As to the second matter I raised, Ms Denham does not actually express a direct preference either for the Upper Tribunal re-making the decision or for the appeal to be sent back for re-hearing by another Tribunal in Middlesbrough. The implication of her submission is the former, as she asks for “a new decision [to] be made based on all the evidence for this case”. I certainly agree the latter course of action would be a waste of time. So I will allow the appeal, set aside the Tribunal’s decision and re-make the decision in question.

15.	Before doing so, I must comment on one further point that Ms Denham has very fairly raised, picking up on a point that Sally had made in her appeal to the Upper Tribunal, where she had written: “I ask why David’s other addresses have been crossed out by HMRC”. This point concerns p.12 of the appeal bundle, which is a screen-print, dated November 2014, headed “PAYE Service; Address Summary”, which in turn is taken from HMRC records about David. It lists the addresses held for David with start dates from January 2011 through to September 2014. The screen-print lists him at Sally’s address from October 2012 till January 2013, then again from February 2013 to early May 2013 and then again from mid-June 2013 to September 2014. He is listed at other addresses between January and February 2013 and during May and June 2013. However, all the other addresses have been “greyed out”, although the fact that they are located in other postcodes in the same locality is visible.

16.	The obvious point to make is that this record only shows the address that HMRC has for David for PAYE purposes. It does not necessarily prove that he is living at the stated address at the relevant time. But Ms Denham’s point is more serious. As she notes, “HMRC has tried removing evidence relating to a different address other than Sally’s at the relevant time of the award period, indeed, not blacked out very well.” The same is true of the screen-print at p.13 and the Experian credit record at p.19. I suppose it is possible that the other addresses had been highlighted, rather than “greyed out”, and it is difficult to be sure from the quality of the photocopies now on file. At the very least, however, the Tribunal should have looked much more carefully and much more quizzically at this evidence produced by HMRC.

The Upper Tribunal’s re-making of the decision under appeal
17.	Shorn of unnecessary detail, Sally’s account is as follows. She has a tenancy in her sole name of a flat I will call “No 1”. All the utility bills etc for the flat are in her sole name. She began a relationship with David in September 2012. Social services first made her children subject to a protection plan in October 2012. The child protection plan review in July 2013 confirmed that the existing plan would remain in force. Under that plan, David was not allowed to enter No 1 while the children were present (they were staying with Martin or their grandparents for a maximum of two nights a week). David lived at a number of other addresses in the spring and summer of 2013, as set out in Sally’s correspondence (e.g. at p.82), at one of which he had a tenancy. David did not actually meet Sally’s children until October 2013.	

18.	I find Sally’s account entirely credible. It is not just that she has been consistent in her account throughout. She has provided ample documentation to support her claim to single parent status at the relevant time. HMRC’s own evidence links David to other addresses at the material time. Sally has also explained why he used her own address at No. 1 for various purposes. She has produced other official letters (e.g. from the DWP) linking David to other addresses. As Ms Denham notes, Sally has never denied having a relationship with David – but she has denied actually living with him at the material time. As Ms Denham also notes, the evidence of the child protection plan is arguably the most compelling evidence. Sally had also explained to the Tribunal how “I went through 18 months of hell & assessments, my home was regularly spot-checked by social services, police and health care professionals.”

19.	HMRC’s final entitlement decision taken on 27 May 2014 was that the Appellant was not entitled to claim tax credits as a single person as from 7 April 2013. HMRC confirmed that outcome in its mandatory reconsideration decision on 5 September 2014. Both decisions were wrong. The Appellant was not living together as husband and wife with her partner as from 7 April 2013.

Conclusion
20.	I therefore allow this appeal and set aside the decision of the First-tier Tribunal (Tribunals, Courts and Enforcement Act 2007, section 12(2)(a)). The decision that the Tribunal should have made is as set out at the head of these reasons (section 12(2)(b)(ii)). In short, the Appellant’s appeal should have been allowed by the FTT. 

Signed on the original			Nicholas Wikeley
on 14 July 2015				Judge of the Upper Tribunal